―The unstoppable flow of low PBR correction is also very active in the shareholder return theme―
On the 3rd of the weekend, the Tokyo stock market rode the risk-on trend for the first time in a while. The Nikkei 225 Stock Average continued to buy even after the closing, showing a rise of more than 400 yen in the middle of the previous session, and it was one step closer to the 28,000 yen level. In the current rising tide of the market, it can be said that there is a group of stocks with high dividend yields that are expected to show high performance while securing resistance to the downside.
●The wait-and-see mood changed, and the Nikkei average suddenly woke up
In the United States, the sense of caution over highly sticky inflation cannot be wiped away, and the rise in long-term interest rates has become prominent again. are demonstrating With the US stock market sideways, the Tokyo market seemed to collapse and continued to hold firm sentiment. However, at the same time, it is certain that the weight of the upper price was also strongly conscious. Although the Nikkei Stock Average showed a rapid recovery in the second half of January, since February it has been in a struggle in the box area centering on the mid-27,000 yen range. There is a high possibility that sooner or later it will be released either up or down,” said a mid-sized securities strategist.
In terms of the external environment, central banks around the world continued to tighten monetary policy, and corporate earnings seemed to be stagnant, so the wind seemed to be in a bad direction. In fact, an Internet securities analyst said, “Many individual investors have a pessimistic view of this trade-off, and there has been a conspicuous move to increase short positions (short sales).” However, there are many cases where the market betrays the expectations of the majority. Next weekend will be the calculation of the Major SQ, the announcement of the results of the Bank of Japan’s Monetary Policy Meeting, and the final press conference of Governor Kuroda. At this difficult timing, the Nikkei 225 has suddenly awakened, and it is a scene that is very impatient if you look at it from the selling direction.
● The target is a group of high-dividend stocks
Southerly winds are blowing in the bulls right now. However, the individual stock strategy is important, and the investment that removes the key points will not bring results. What should I pay attention to as an investment target from here? Targeting high-dividend stocks is seen as a promising investment method with high expected value peculiar to the March market.
In the Tokyo market, around this time, the movement to collect dividend rights becomes active toward the end of March. There are about 2,300 companies in the three markets of Prime, Standard, and Growth, which account for more than half of the total. And recently, as companies have become more oriented toward returning profits to shareholders, ex-dividend rights have expanded significantly on a monetary basis. In particular, at the end of January this year, the Tokyo Stock Exchange (TSE) made a big topic by clarifying its policy to seek improvement measures for companies that have consistently fallen below 1 times PBR (price book value ratio). Strengthening shareholder returns is an effective measure to eliminate low PBR, so the TSE’s “Grand Order” will eventually lead to encouraging companies to implement measures such as share buybacks and dividend increases. .
● Shareholder return is a magic wand to break PBR 1 times
If the PBR is less than 1x, it means that the stock price is undervalued below the company’s net assets, that is, below the company’s dissolution value. If that is the case, then one could conclude that such low PBR stocks are attractive investment targets because they are left at a bargain price, but in reality it is not so simple.
A low PBR of less than 1x reveals that the company is not using its equity capital (net assets) effectively and has been left dormant. does not change. In fact, even now, almost half of the companies listed on the prime market are below 1x, suggesting that they are not temporarily content with being below the liquidation value due to irregularities. ROE (return on equity) is an indicator that has a strong correlation with PBR, but both indicators place equity in the denominator, so it is possible to increase the figure by strengthening the stance of returning profits to shareholders without letting the funds fall asleep in internal reserves. . ROE is not linked to stock prices, but maximizing profits relative to shareholders’ equity is the primary objective, and it is important as a supplement to PBR. Ideally, a company should raise its ROE in the process of raising its PBR level.
In any case, the TSE’s move to improve the low PBR neglected has permeated the stock market as an investment theme, and this may serve as a catalyst for companies to further strengthen their shareholder return stance. be. Originally, stocks with high dividend yields have proved that they are doing well in terms of business performance or that they are financially abundant, so we can expect further moves to strengthen returns in the future.
● Gaining an edge in “dividend right-taking play”
And at this time of year, there is a strong tendency for investors to invest in such companies and enjoy returns to shareholders, and to put it bluntly, there is a strong tendency to accelerate the movement of “dividend right holders” who seek to obtain dividends in a very short period of time. However, for the investor, this method of rushing to obtain dividend rights is not very convenient.
This is because, on the ex-dividend date, the share price is subject to downward pressure by the amount of the dividend. Therefore, when it comes to that one trade, it is logical that no profit can be generated by desk calculations. Furthermore, there is also the idea of eliminating the risk of stock price declines by bridging selling (selling only the amount of actual stocks that you own) to eliminate the risk of stock prices falling, but this means that the short selling side will not sell to investors who are buying on credit. By being in a position to pay the ex-dividend adjustment, in the end, the profit from the dividend will be offset.
However, it is a fact that the last-minute buying to acquire dividend rights is still causing a big surge in the stock market at this time. This is the deepest part of the market, and the concept of “dividend right-taking play” is similar to the “financial results play” seen when companies announce their financial results. The key is to set the primary goal of finalizing capital gains before the ex-rights date of March 30th. In other words, if you get a gain on price appreciation that exceeds the dividend, you should approach it with the stance of closing it once without going over the last day of the rights acquisition.
Of course, it is necessary to be careful not to invest only in the dividend yield and ignore the actual situation of the company. In this top special feature, we carefully selected 10 stocks with high dividend yields that are attractive even for medium-term holdings and are easy to ride the trend of “dividend right-taking play”.
●These 10 stocks hit the market in March!
◎Yamaichi Electronics<6941> [東証Ｐ]
We mainly develop IC sockets used for inspection, connectors, and mounting, and are capturing demand for semiconductor-related equipment. Another point is that the company deals with optical-related products such as optical filters. The overseas sales ratio is high, accounting for more than 80% of sales, and the company is also benefiting from the strong dollar and weak yen. Operating income for the April-December period of 2010 increased by 31% year-on-year to 7,854 million yen, securing a significant increase. The full-year forecast for the fiscal year ending March 2023 is expected to be 8.25 billion yen, a slight decrease from the previous fiscal year after an upward revision. The dividend yield is in the 4.6% range, and the PER is also in the 6x range.
◎ Sodanica<8158> [東証Ｐ]
It is an independent chemical trading company and ranks first in the industry in terms of handling volume of its main product, caustic soda. Focusing on aggressive management, we aim to become a general trading company dealing in chemicals and functional products. Demand for caustic soda is strong in the food industry and the electronics industry, and product price hikes are also contributing to higher profits. In functional materials, composite films performed well, and environment-friendly value-added products grew, contributing to earnings. In the term ending March 2011, operating income is expected to increase by 33%. Even after the stock price soared after opening the window on February 21, it has been absorbing short-term sales, and this plateau will be a good buying opportunity.
Although it has a stable business base as a pioneer in catalog mail order, in recent years it has shifted its direction to a comprehensive mail order company strategy and is making full use of M&A to acquire customers in the field of online mail order as well. Under the medium-term management plan “Next Evolution 2024”, which started in FY2010, we are promoting initiatives that prioritize both sales growth and profitability improvement. Operating income for the fiscal year ending March 2023 has been revised upward from the previous forecast of 4.5 billion yen to 5.5 billion yen. Even with this, profits are expected to decline by 21% year-on-year, but there is a strong possibility that the company will return to the path of increasing sales and profits again from the next term onwards. The PER 7 times range is a bargain, and the dividend yield of around 5.4% suggests room for the stock price to rise. In the development that puts the 4-digit stand in the field of vision.
◎Hoosiers Holdings<3284> [東証Ｐ]
Mainly developing newly built condominiums, demonstrating strengths in large-scale, high-quality condominium development mainly in the suburbs. He has expanded his business area to the real estate management and real estate investment fields, and is devoted to establishing a profit base through a stock business that guarantees continuity. For the fiscal year ending March 2011, sales of condominiums are doing well, and there is no change in the trend of earnings expansion. Operating income is expected to increase by 9% year-on-year to 7.3 billion yen. there is The dividend for the fiscal year ending March 2010 was 36 yen, an increase of 12 yen from the previous term, in a positive way to return profits to shareholders. Converted to a dividend yield of just under 5.6%, it can be said to be quite attractive.
◎PS Mitsubishi<1871> [東証Ｐ]
Mainly in the civil engineering and construction sectors, it has strengths in construction using high-strength PC (prestressed concrete). Although the profit base is stable due to the abundant backlog of orders, the operating income for the fiscal year ending March 2011 is expected to drop 25% year-on-year to 4.95 billion yen due to an increase in low-profit projects. However, in terms of the stock price, factors are progressing, and considering the progress rate, it is assumed that the full-year forecast may exceed the forecast. With a PER of less than 10 times and a PBR of 0.6 times, it feels undervalued, and the dividend for the fiscal year ending March 2011 is planned to be 30 yen, which is the same as the previous fiscal year’s result, and the dividend yield is maintained at around 4.5% when converted to market value. Moreover, since it is a lump-sum payment at the end of the term, it is easy for last-minute buying to acquire rights.
◎ TACHI-S<7239> [東証Ｐ]
A major manufacturer of car seats that handles everything from development to production.Honda in Japan <7267> [東証Ｐ]and Nissan <7201> [東証Ｐ]is our main customer, and we are expanding overseas to North America, Central and South America, China, etc. by making full use of our strong global network. Although the business performance was unavoidably in the red in the fiscal years ended March 2021 and 2022, it is expected to return to the black in the fiscal year ending March 2023. Although the capital adequacy ratio has been on a declining trend for the past few years, the most recent data shows that it is 46%, and there is no concern about the financial side. The company is positive about returning profits to shareholders, and plans to pay a dividend of 73.60 yen for the fiscal year ending March 2011 based on the DOE (consolidated dividend on equity ratio). The dividend yield is very high at 5.8%. PBR is also in the 0.5x range, and there is plenty of room for review.
◎Mitsubishi Steel<5632> [東証Ｐ]
Manufactures special steel and precision springs for automobiles, trucks, construction machinery, and home information appliances. A long-established company with a history of nearly 120 years, when it was founded, it was engaged in the manufacture of springs for spinning machines, and later expanded its business domain to the production of special steel, which is the material for springs. The strength of being able to handle everything from materials to finished products has been cultivated during this history. In the fiscal year ending March 2011, operating income will be increased from the previous forecast of 5.5 billion yen to 6.5 billion yen (up 4% year-on-year) due to the effects of import cost improvement and product price hikes. Furthermore, in the fiscal year ending March 2012, a significant increase in operating income is expected due to the settlement of the supply chain problem that occurred in this fiscal year and the penetration of the price increase effect. The stock price is clearly on the rise, but with a dividend yield of around 4%, the PBR of 0.4 is still undervalued.
A major manufacturer of cold-rolled steel bars that are processed from materials such as steel bars and coils. Thanks to the strengths of Nippon Steel Group, demand is being captured mainly for automobiles and machinery. Due to the increase in product prices in response to rising raw material costs, performance is likely to improve, and after several upward revisions in the fiscal year ending March 2011, operating income is expected to decrease 8% year-on-year to 990 million yen. . Although operating income is expected to decline, the operating income in the previous fiscal year increased sharply by 7.3 times compared to the previous fiscal year, setting a record high for the first time in 16 years. . Although the dividend has been reduced from the results of the previous fiscal year, the dividend yield is around 4%, and the year-end lump-sum dividend. The stock price is still markedly undervalued, with the recent sudden move of more than 0.5 times the PBR.
◎Japan Land Development<1887> [東証Ｐ]
A general contractor with a proven track record in skyscrapers, it excels in earthwork using heavy machinery for roads and tunnels. In the term ending May 2011, the number of completed constructions is expected to increase, leading to a high top-line growth of 35% year-on-year. The construction business, which accounts for about half of the sales composition, is expected to reflect the effect of increased sales on the profit side, although the increase in material costs is a headwind. Recently, it has announced that it has signed an “ESG management support loan” contract with MUFG Bank. PBR is in the 0.6x range and PER is in the 7x range, so there is room for review. The company is a company whose fiscal year ends in May and cannot be expected to have last-minute buying needs, but its dividend yield in the 4.5% range is highly valued.
As a custom-built housing company, it is focusing on development in the suburbs of the Tokyo metropolitan area and in rural areas. Performance continues to improve. Sales and profits continue to hit record highs. In the fiscal year ending May 2011, the purchase of carefully selected land and other items has been successful, and both orders and deliveries are going well, and operating income is expected to increase by 14% year-on-year to 13.5 billion yen. In terms of supply and demand for stocks, the short-selling balance is high, and the recent credit ratio is 0.09 times. The company is also a company whose fiscal year ends in May, so it is not the right time to rush to acquire rights. becomes.
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